Caspase 3 is required for the differentiation of a wide variety of cell types, yet it remains unclear how this apoptotic protein could promote such a cell-fate decision. Caspase signals often result in the activation of the specific nuclease caspase-activated DNase (CAD), suggesting that cell differentiation may be dependent on a CADmediated modification in chromatin structure. In this study, we have investigated if caspase 3/CAD plays a role in initiating the DNA strand breaks that are known to occur during the terminal differentiation of skeletal muscle cells. Here, we show that inhibition of caspase 3 or reduction of CAD expression leads to a dramatic loss of strand-break formation and a block in the myogenic program. Caspase-dependent induction of differentiation results in CAD targeting of the p21 promoter, and loss of caspase 3 or CAD leads to a significant down-regulation in p21 expression. These results show that caspase 3/CAD promotes cell differentiation by directly modifying the DNA/nuclear microenvironment, which enhances the expression of critical regulatory genes.development | gene expression | non-apoptotic caspase activity | epigenetics